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Court Decision Stops Charity Payments

19 February 2013 at 11:03 am
Staff Reporter
Potentially millions of dollars are at stake for the charitable sector after the Supreme Court in Victoria upheld an Appeal challenging penalty payments made to charities.

Staff Reporter | 19 February 2013 at 11:03 am


Court Decision Stops Charity Payments
19 February 2013 at 11:03 am

Potentially millions of dollars are at stake for the charitable sector after the Supreme Court in Victoria upheld an Appeal challenging penalty payments made to charities.

Justice Dixon upheld the appeal by the Melbourne City Council into the fate of a long-standing sentencing practice of Victorian Courts, which involves offenders making payments to charity.

PilchConnect, an independent legal service for the Not for Profit sector, says the decision means that magistrates and other courts can no longer order an offender to make a donation to a charity when imposing special conditions while releasing them without conviction as part of an adjourned undertaking.

Last year, MCC made arguments before Justice Dixon that Courts cannot invite offenders to make payments to charities, as a condition of an undertaking, or make payments into the Court Fund, and rather should fine individuals.

PilchConnect made submissions against MCC’s arguments at the hearing last year, appearing as an amicus curiae (otherwise known as friend of the court).

PilchConnect’s Director, Juanita Pope, said today’s outcome will have a significant impact on the charitable sector.

“Charities operate with limited resources to help communities and the disadvantaged, and many rely on public donations to survive. Where Courts can encourage offenders to give to charitable causes, we should be supporting that,” Pope said.

Pope said there is a long tradition of Courts inviting offenders to make a donation to a charity as a condition of an undertaking, rather than paying a fine.

“This approach works for both charities, and for the rehabilitation of offenders who are given the opportunity to make a meaningful contribution back to the community.”

MCC’s appeal was against an August 2011 Magistrates’ Court sentencing decision which obliged an individual who pleaded guilty to breaching the Food Act to make a donation to St Vincent De Paul’s food van service.

While Justice Dixon found in favour of MCC’s arguments, his judgment noted “the history and significance of the court fund and the support provided by local courts to their communities” and  that as a result of the decision, “negative and possibly unintended consequences, for beneficiaries of the court fund and charities, may follow.”

PilchConnect urged Parliament to take action to restore the sentencing option allowing offenders to contribute to the community through charitable giving when their matter is adjourned.

PilchConnect was represented on a pro bono basis by Andrew Woods and Samuel Bird of Counsel and law firm Herbert Smith Freehills. 

A statement from the Melbourne City Council says the reason for the appeal was to determine whether it was appropriate for a magistrate in a Food Act prosecution to order an offender to make a direct payment to a charity nominated by the magistrate.

“The appeal was not in relation to a payment to a charity via the Court Fund.

"The clarification was sought in light of other recent similar decisions by the Magistrates Court involving the City and Food Act prosecutions.

“His Honour made a number of other observations relating to policy and possible legislative amendments that are properly left to the State Government.

“The City of Melbourne will not seek costs nor will it seek repayment of any monies from St Vincent de Paul,” the statement said.

“The City of Melbourne supports the excellent work St Vincent de Paul does in the city and around the state, and the operation of the Court Fund (which is designed to collect monies from offenders ordered by the courts and distribute them to charity).”

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  • What would be interesting to know is:
    – how much revenue charities have collected from such court orders;
    – how the selection works, and
    – whether the payment is tax deductible, and if so,
    – whether the courts take into consideration the deductibility of the amount and the convicted offenders’ marginal tax rate.

    Any thoughts on this?

    • Kerri Harris says:

      As a donation is non-reciprocal, i’m not sure this would fall under the defination of a donation? The artical also refers to it as a direct payment and in return for this payment they no longer have to pay the fine. So I guess this does not make it non-reciprocal.

  • Michael Adamson says:

    I wonder whether MCC has considered the cost of providing the service St Vincent and other charities provide to their city, should these charities pull out. If councils took the full responsibility to provide all social services, they would struggle to fulfill the role and the resultant social discohesion would be a serious problem.

    • John Brown says:

      On what grounds is this “resultant social discohesion would be a serious problem” based?

      The implied social impact is quite extensive. Is there any research or information available in support of this?

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